MILAN, Oct 23 A former manager of Finmeccanica
SpA has been arrested over allegations of
international corruption, his lawyer said on Tuesday, in the
latest move in a broader probe facing Europe's third-biggest
defence group.

Former commercial manager Paolo Pozzessere, currently an
adviser to the Italian group, was arrested as part of an
investigation into supply contracts with Panama and, according
to investigative sources, Brazil.

"It is the first arrest in the Panama affair," Pozzessere's
lawyer, Carlo Marchisio, told Reuters.

In a statement later on Tuesday, Finmeccanica said the group
had not paid any compensation for brokering three contracts in
Panama worth 180 million euros ($233 million).

Pozzessere, who resigned as commercial director of
Finmeccanica in September 2011, had not been notified of an
investigation, Finmeccanica said.

The probe covers figures connected to Finmeccanica as well
as the extent of links between government officials and the
state-controlled company.

EX-MINISTER PROBED

Former industry minister Claudio Scajola is also under
investigation.

"I found out I was being investigated only now," Scajola
told Italian television on Tuesday.

Scajola denied any wrongdoing from the time he was a
minister in the government of former prime minister Silvio
Berlusconi.

Police searched Finmeccanica offices in Naples and Rome on
Tuesday in relation to the arrest of Pozzessere, said one of the
investigative sources, who requested anonymity because he was
not authorized to speak publicly.

"It's linked to the news of the arrest," a Milan trader
said, referring to the stock decline.

The probe, led by prosecutors in Naples, is one of several
under way at Finmeccanica. Chairman and Chief Executive Giuseppe
Orsi is also under investigation over a 560 million-euro ($730
million) Indian helicopter contract.

Orsi has vowed to stay in his post to clear his name but
some political parties have raised questions about whether he
should remain at the helm of the country's second-biggest
private group.

A meeting that was due to be held between Finmeccanica's top
executives and the government last week was cancelled.

Asked about Finmeccanica top management, Italian Economy
Minister Vittorio Grilli said: "I have no comments to make."
(Additional reporting by Stephen Jewkes and Giuseppe Fonte;
writing by Stephen Jewkes; editing by David Cowell and Matthew
Lewis)

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